‘Intelligent use of data will drive next wave of economic revolution’
During the launch of your book, you talked about how data can disrupt emerging business models and how such disruptions can boost sharing economy. How will this work in Nigeria considering the nature of data management in the environment?
The book, “The Future is Shared” is a research-based discourse on the disruptive implications of the sharing economy as the new business frontier, particularly from an emerging market perspective. It explores the transformational leverage of connected abundance, as made possible by crowd-based socio-capitalism concepts like crowdfunding, crowdsourcing, access economy, on-demand economy and collaborative economy. The correlation lies in the fact that the success of this business model is inextricably linked to the richness and broadness of data. The book thus focuses on ‘dataconomy’ businesses, such as Uber, Airbnb and others, and how they rely heavily on the use of data to profile, incentivize, match-make, predict risk, quantify value and distribute opportunities on a real-time basis. In this way, data is the oil that fuels the sharing economy.
Algorithms are utilized to verify users, and they also offer personalized suggestions and propositions based on past and anticipated behavior. In the same vein, intelligent use of data will drive the next wave of the economic revolution, through FinTech, e-commerce and other digital offerings, and we thus have to consider these two initiatives as two sides of a double-edged sword. When one drives front-end opportunity, the other must necessarily fuel the back-end engine, in order to make the front-end function in a dynamic close-loop. It must thus be reiterated that future businesses will soar on the wings of advanced data application – I am talking about monthly Excel-based descriptive reporting or performance dashboard data, but synthesized data that combines both the structured and unstructured data to effectively drive prescriptive and predictive insight generation. High level data application, where we can accurately predict next products that customers would buy in the next 5-10 years, extrapolateshow social changes will drive consumption, how tweets will inform stock price growth or decline,and how weather data will inform market opportunities.
How can this business model be maximized?
In essence, we can only maximize the sharing economy business model and other emerging digital disruptions if we are able to build world-class local capacity in data science, to make sense of our data. Of course, there are offshore solutions that are ready-made but they will fail to understand the context that uniquely definesNigerians. No online sentiment miner can interpret our nuances with precision by using algorithms built for developed markets. We have to build our own, one that is true to our reality. For example, we are going to see a huge revolution in out-of-bank lending due to the growth ofFinTech peer-to-peer social lending opportunities, which rely on an aggregation of customers’ social reputation built on social footprints like Facebook, Twitter, LinkedIn, and Instagram. It will use customer’s social network size, followers’ ratings,engagement rate based on how many of their followers respond to posted comments, textual analysis of sentiment expressed in posts, types of pictures posted, places checked into, career history, types of events attended, types of groups followed and many others complex factors in order to determine whether a customer will qualify for a loan or not, and also to determine their propensity to default.
This type of analysis is not copy-and-paste, and instead it requires understanding of the Nigerian mindset in order to build these models.
In addition, this evolution can be likened to what happened to theNigerian oil industry.We have oil in an unrefined form and have to export it and then buy it back at significant value loss. This process is what we must reverse in the emerging knowledge-based economy, by building capacity ahead of the expected shifts. We must understand how to monetize our own data, and develop emerging market models that can be exported for foreign exchange earnings. India is already doing this, and I strongly believe that Nigeria can become the African continent’s outsourcing headquarters for data scienceopportunities. I am passionate about this, because it will be a secondary slavery if we miss this next wave of business revolution and lose out on the opportunity to build the local capacity that is required for the evolving global shifts. Nigeria has what it takes to raise a new generation of world-class data scientists, who can tap into the $125 billion big data analytics market. Facts from the IDC already indicate a need for almost 200,000 people with deep analytical skills in the US by 2018, and a requirement of five times that number for positions with added data management and interpretation capabilities. If we act fast, Nigeria can be at the center of this,thus maximising foreign exchange earnings and resulting in substantial job creation.
What impact do you seek to achieve with investment in Data Science Nigeria?
Well. There are two dimensions to every initiative: first, the immediate social impact, and next, the long-term economic return. Any meaningful initiative must not be built as an instant money machine, and should recognise that talents abound across all socio-economic classes. It must thus start by creating an open source model, where young passionate graduates with potential are non-discriminately exposed to the world of data science tools at no cost. It may interest you to know that an average introductory training course in data science costs tens of thousands of US dollars. How many Nigerian undergraduates, graduates and young analysts can afford this? For this reason, it is a non-profit venture – at least, for now.
What is the benefit for the country and how does it benefit participants?
I have previously stated how huge the market size of data science and big data are. Even if we are only able to access 2% of that, it is still of huge value to Nigeria – it will mean more than 1 trillion naira in economic return. Can you imagine the implications of injecting this amount of money into our economy, both for direct beneficiaries as well as the many ecosystems of new businesses that it will create? I am sure you know how many international companies have set up their offices in Bangalore, India, because of the fact that it has become a concentrated domain for IT. Our travel, hospitality, and even educational institutions will be indirect beneficiaries of this huge growth. It will naturally attract serious investment in other sectors, because the intellectual capital required to power emerging opportunities in power, manufacturing, digital innovations and many other sectors will find maximum expression in Nigeria.
For the individuals who lead this revolution, they become the crème-de-la-crème of the new knowledge-driven economy. Not only will this revolution drive massive overall social benefits for Nigeria, but these individuals will also lead in value ownership by default, to a largeextent. Today, all existing research data indicates that data science is the number one career in ICT, and the Harvard Business Review even recently described it as the “sexiest job of the 21st century”. It’s not difficult to imagine the potential return of being a part of this league of experts, possessing exclusive skills that command huge premiums.
This can also reverse the damaging ‘brain drain’ phenomena, because an ecosystem of experts is built and many Nigerians in the diaspora can see more compelling reasons to return home. Yaba is already emerging as our own Silicon Valley, and I am convinced that our country is bound for greatness in the emerging ICT sector.
One of the submissions in the book says ‘your future as a nation, company or individual depends on you optimize your assets including manpower’. Can you provide more insight on this?
The world’s natural resources are not available in infinite quantities, and they are in fact depleting at an alarming rate. We need to be concerned about our depleting assets, and our increased waste. We must be conscious of the need to preserve our planet for the next generation, and the following generation after that. We cannot continue to consume and produce arbitrarily, when mechanisms exist to recycle, reallocate and reconfigure previously used products to serve more people, at a lower cost, with minimal impact on the environment. This is what sustainable consumption refers to. We all have underutilized assets around us, which double as raw materials for the emerging circular economy, the intent of which is to extend product life cycles via the recirculation of goods. Goods that would otherwise have been thrown away are given new life, through access to second-hand markets. Right now, on a global level, the earth’s resources are being consumed in unsustainable ways.
Production is encouraged in excessive quantities, which causes excess wastage, but even if the quantities produced were adequate rather than excessive, appropriate methods of disposing by-products remains a huge problem. It’s certainly inspiring to observe that some businesses are already emerging with this type of operational mindset. Instead of extracting natural resources to produce new goods, these businesses recover and reuse materials that have already been taken, and by doing so, they reduce overexploitation and protect these finite resources. Reuse, remanufacturing, rental schemes, design for reparability, and recycling are the preferred business models adopted by the circular economy. As you know well, our traditional economy is based on capitalism, with a take–make–waste approach. In contrast, the circular economy has a recover–reuse–recycle approach. Businesses utilizing the circular economy concept are environmentally conscious, and seek to replenish rather than deplete the earth’s scarce resources. The circular economy celebrates repair, reuse and remanufacture as its pillars, which are essential to achieving sustainable resource use.